Attention Contractors - ncmahq.org · Attention Contractors: You Will Be Graded! Past Performance in Government Contracting . ... CPAR. ABC Bids on a New RFP ABC Bids is Evaluated

Attention Contractors: You Will Be Graded! Past Performance in Government Contracting

Breakout Session #: A07

Mark Blando, JD, Partner, Eckland & Blando LLP Date: Monday, July 25

Time: 11:15am–12:30pm

Agenda

1. Past Performance Information (PPI) Basics

2. How Does It Work?

3. Challenges

& Strategies

4. Cases & Recent

Developments

APMRS (Delivery)

EDRS (Quality)

T4D List (Terminated Contracts)

Other Systems, TBD

CPARS

CPAR

ABC Bids on a New RFP

ABC Bids is Evaluated with PPI

ABC Bids on an RFP

ABC Bid is Evaluated

ABC Wins the Contract

ABC Contract Performance

Initiation

ABC Contract Performance Intermediate

ABC Contract Performance Completion

Performance Assessment

Contractor Review & Rebuttal

System for Award

Management (SAM)

CCR ORCA FPDS EPLS PPIRS/FAPIIS FedBizOpps

Contractor Review & Comment

What is PPI?

“Past Performance Information”

FAR § 42.1501(a)

Past performance information (including the ratings and supporting narratives) is relevant information, for future source selection purposes, regarding a contractor’s actions under previously awarded contracts or orders. It includes, for example, the contractor’s record of:

1. Conforming to requirements and to standards of good workmanship; 2. Forecasting and controlling costs; 3. Adherence to schedules, including the administrative aspects of performance; 4. Reasonable and cooperative behavior and commitment to customer satisfaction; 5. Reporting into databases; 6. Integrity and business ethics; and 7. Business-like concern for the interest of the customer.

“Past Performance Information”

FAR § 42.1501(a)

Past performance information (including the ratings and supporting narratives) is relevant information, for future source selection purposes, regarding a contractor’s actions under previously awarded contracts or orders. It includes, for example, the contractor’s record of:

1. Conforming to requirements and to standards of good workmanship; 2. Forecasting and controlling costs; 3. Adherence to schedules, including the administrative aspects of performance; 4. Reasonable and cooperative behavior and commitment to customer satisfaction; 5. Reporting into databases; 6. Integrity and business ethics; and 7. Business-like concern for the interest of the customer.

PPI History: Origins (FASA) • Office of Federal Procurement Policy (OFPP)

Policy Letter 92-5: • Established “requirements for evaluating contractor

performance and for using past performance information in the contractor selection process.”

• Federal Acquisition Streamlining Act of 1994 (FASA)

41 U.S.C. § 405 • Established the PPI System • Directed OFPP to “establish policies and procedures

that encourage the consideration of the offerors’ past performance in the selection of contractors.”

FAR Clauses

• FAR 13.106-1 and -2: Contracting Officer may use past performance as a basis for award under simplified acquisition procedures

• FAR 15.304 and 15.305: Past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold (includes construction)

• FAR 36.303-1: Past Performance Shall be included as an evaluation factor for two-phase design-build source selections

• FAR 36.602: Agency must consider offeror past performance in selection of firms for architect-engineer contracts

• FAR 42.1501: Definition of “Past Performance Information”

• FAR 42.1502 and 42.1503: Agencies shall prepare an evaluation of contractor performance and submit to PPIRS

• FAR 8.405-1 and -2: Evaluation of past performance when ordering under Federal Supply Schedules

• FAR 9.105-1: Contracting officer shall consider relevant performance information when making a determination of responsibility

• FAR 12.206 – Use of past performance for commercial items

PPI History – The Problems

2008 – DOD IG Report: “Contractor Past Performance Information”

– CPARS Examined • 68% had overdue past performance assessments reports • 39% of systems contracts registered more than 1 year late • 82% of past performance reports were deficient

– Unusable: Contracting Offices lacked sufficient PPI to make informed decisions in source selection

PPI History – The Problems 2009 – GAO Report of Federal Agencies Use of Past

Performance Estimated Contracts Requiring an Assessment That Had an Assessment in FY 2007

Dept/Agency

Est. Contracts Requiring Assessment

Contracts with an Assessment

Percent

Air Force 2,795 1,300 47%

Navy 3,879 1,622 42%

Army 6,145 1,971 32%

Other DoD 1,408 303 22%

Homeland Security 4,131 535 13%

NASA 3,706 1,093 29%

Energy 840 183 22%

Total 22,904 7,007 31%

Source: Better Performance Information Needed to Support Agency Contract Award Decisions, GAO Highlights (April 2009).

• May 2010 OFPP Memo – CPARS is the only PPI reporting

system to be used to collect and transmit performance evaluations to PPIRS

– No new systems will be built

PPI History – The Fixes

CPARS Contractor Performance Assessment Reporting

System (originally a DOD system only)

• July 2009 OFPP Memo – Reporting required into common database

(PPIRS) – Establish internal agency procedures – Assign responsibility within Agency – Consider Small Business Subcontracting Plan – Compliance review by OFPP

PPI – The Progress

June 2013 – GAO Report to Congressional Committees, Contractor Performance: DOD Actions to Improve the

Reporting of Past Performance Information – Strong improvement in reporting and timeliness, still working

through backlog – PPIRS compliance: increased from 56 percent in 2011 to 74

percent in 2013

Dept/Agency

Est. Contracts Requiring Assessment

Contracts with an Assessment

Percent

Air Force 12,980 11,243 86.6%

Navy 19,632 16,609 84.6%

Army 39,921 31,111 77.9%

Total DOD 79,745 65,003 81.5%

Source: Richard Ginman, Memorandum re: Contractor Past Performance Assessment Reporting – 1st Quarter FY 2014.

January 9, 2014 – Performance Review

How Does It Work?



ABC Bids on an RFP


ABC Wins the

Contract


Initiation



CPARS

CPAR




APMRS (Delivery)

EDRS (Quality)


Other Systems, TBD

System for Award

Management (SAM)

CCR ORCA FPDS EPLS

FedBizOpps PPIRS / FAPIIS

How it used to be . . .

CPARS

CPAR

ACASS

CCASS




ABC Wins the Contract

ABC Competes on an RFP

ABC Proposal is Evaluated



Initiation




PPIRS

PPIRS-SR (Statistical

Report)

PPIRS-RC (Report Card)

APMS (Delivery)

EDRS (Quality)


etc.

SAM - CCR - ORCA - FPDS

FAPIIS

In The Beginning. . .

• HOWEVER - Responsibility Determinations In making a responsibility determination, the contracting officer “shall consider relevant past performance information.” FAR 9.105-1(c)

This information can include:

• Commercial Sources • Publications

• Suppliers • Subcontractors

• Customers • Financial Institutions

• Government Agencies • Business and Trade Organizations

ABC Bids on an RFP


ABC Wins the

Contract

• No Past Performance Information: “If a contractor is truly a new entity and none of the company principals ever performed relevant work for others, the company is considered to have no past performance.”

– This may not be used as a factor against you.


• Reporting Thresholds: – Above Simplified Acquisition Threshold: $150K – Architect/Engineer: $35k – Construction: $700k

• Teaming, Joint Venture Partners, and Subcontractors: No separate ratings. All comments on Non-Prime Contractor performance are included on the Prime’s evaluation.


Initiation





• Report Cards: “[A]ssesses a contractor’s performance and provides a record, both positive and negative, on a given contract for a specific period of time.”

Performance Evaluation FAR 42.1503(b)(1) • The evaluation should include a clear, non-technical description of

the principal purpose of the contract or order.

• The evaluation should reflect how the contractor performed.

• The evaluation should include clear relevant information that accurately depicts the contractor’s performance, and be based on objective facts supported by program and contract or order performance data.

• The evaluations should be tailored to the contract type, size, content, and complexity of the contractual requirements.

Evaluation Factors FAR 42.1503(b)(2) Evaluation factors for each assessment shall include, at a minimum, the following: (i) Technical (quality of product or service). (ii) Cost control (not applicable for firm-fixed-price or fixed-price with economic price adjustment arrangements). (iii) Schedule/timeliness. (iv) Management or business relations. (v) Small business subcontracting (as applicable, see Table 42-2). (vi) Other (as applicable) (e.g., late or nonpayment to subcontractors, trafficking violations, tax delinquency, failure to report in accordance with contract terms and conditions, defective cost or pricing data, terminations, suspension and debarments).

Performance Evaluation

FAR 42.1503(b)(3),(4) (3) Evaluation factors may include subfactors. (4) Each factor and subfactor used shall be evaluated and a supporting narrative provided. Each evaluation factor, as listed in paragraph (b)(2) of this section, shall be rated in accordance with a five scale rating system (i.e., exceptional, very good, satisfactory, marginal, and unsatisfactory). The ratings and narratives must reflect the definitions in the tables at 42-1 or 42-2 of this section.

Performance Ratings

Exceptional (5): Performance meets and exceeds many contract requirements to the Government’s benefit

Very Good (4): Performance meets contractual requirements and exceeds some to the Government’s benefit

Satisfactory (3): Performance meets contractual requirements

Marginal (2): Performance does not meet some contractual requirements

Unsatisfactory (1): Performance does not meet contractual requirements and recovery is not likely in a timely or cost effective manner

Source: FAR Table 42-1 – Evaluation Ratings Definitions.

Mandatory Reporting

• Intermediate Reports – Required: Every 12 months – Milestones: Timed to coincide with options exercised, award fee

determinations, and program milestones. – Scope: Only performance since the last report was taken is evaluated

• Final Report – Contract Completion: Required – Contract Termination: Required – Scope: Only performance since the last report was taken is evaluated

• Initial Report – Required: If performance period is <365 days – Scope: Only covers up to 12 months of actual

performance

Optional Reporting

• Out-Of-Cycle Reports – Triggered: By significant changes in performance – Optional: May be requested by contractor in writing or written at the

government’s discretion – Maximum: One per year

• Addendum Report – Scope: Evaluation of contract close-out, warranty performance,

performance of other administrative requirements – Optional: Written at government’s discretion

• Always an Option: While exceeding the SAT mandates a PPI report, an agency may also submit a report for a contract below the SAT. (FAR 42.1502)

Performance Assessment Right to Review and Comment: Upon CO signature, Report Card is sent to Contractor.

– Delivery: provided to contractor “as soon as practicable after completion of evaluation”

– Response Time: 14 day review period

– Rebuttal and Review FAR 42.1503(d): Contractor may seek review one level above the CO


Initiation





Report Cards & CPARS

CPARS – “Contract Performance Assessment Reporting System”: A web-enabled application that collects and manages a library of automated contractor report cards.

CPAR – “Contract Performance Assessment Report”: The module (“report card”) that is processed in PPIRS.

CPARS

CPAR

- Agencies prepare and submit all PPI evaluations into CPARS - Evaluations are automatically transmitted to PPIRS within 14 days after

contractor is notified of availability to comment. - Updates to the information in PPIRS, based on any contractor comments,

are made within 14 days of receipt. - Agency response is updated to PPIRS within 14 days of its receipt

“Contract Performance Assessment Reporting System”

CPARS: “[A] web-enabled application that collects and manages a library of automated contractor report cards”

Past Performance Information Retrieval System

PPIRS

“PPIRS is a web-enabled, enterprise application that provides timely and pertinent contractor past performance information

to the Department of Defense and Federal acquisition community for use in making source selection decisions.”

PPIRS-RC: Report Card -Contracts of at least $150K -Used in formal source selection evaluation PPIRS-SR NG: Statistical Reporting Next Generation -Contracts under $150K -Less formal, minimal data

Rumors of my death have been greatly

exaggerated

FAPIIS • Information Consolidation System: Contains

specific information on the integrity and performance of covered federal agency contractors and grantees. Includes last five years of information:

– PPI Evaluations – Civil, Criminal, and Administrative Proceedings – Suspensions and Debarments – Non-Responsibility or Recipient Not-Qualified Determinations – Termination for Default, Cause, or Material Failure to Comply – Defective Pricing Determinations – Administrative Agreements Issued in Lieu of Suspensions

and Debarments • Accessibility: Through PPIRS

Federal Awardee Performance and Integrity Information System

PPIRS

FAPIIS PPIRS-RC

Future Contracts & PPI

• Competitive Negotiations: Evaluation factor for contracts exceeding $150,000 Unless: CO documents that PPI not relevant to that acquisition

•

• Responsibility Determinations, for both: • Sealed Bidding and • Competitive Negotiations

• Limited Use: expires after three years Exception: Six years’ PPI can be used for Construction and Architect-Engineer contracts.


ABC Bids is Evaluated with

PPI

Requirements for all Executive Agencies:



ABC Bids on an RFP


ABC Wins the

Contract


Initiation



CPARS

CPAR




APMRS (Delivery)

EDRS (Quality)


Other Systems, TBD

System for Award

Management (SAM)

CCR ORCA FPDS EPLS FedBizOpps

PPIRS / FAPIIS

Challenges & Strategies

PPI is Critical

“Next to being able to perform the work, past performance is probably the most important factor to consider when

submitting a proposal. Every single past performance evaluation has the ability to make or break their future.

Not only should contractors ensure that they do everything

possible to achieve positive past performance evaluations, they should fight negative evaluations

through the appropriate channels.”

Common Complaints In report cards:

• Unjustified evaluation

• Grade Inflation

In award decisions:

• Ambiguous Criteria/Arbitrary Evaluation

• Informal PPI Source

Proactive Strategies

• Quality Performance: Review the criteria and make sure they are all met.

• Communication is Key: How well you deal with others is an express factor. So, seek input from the agency, and proactively address issues

• Choose your partners carefully: PPI of partner of subcontractor (if will “perform a substantial portion of the contact”) will be evaluated too.

• Post-Award Debriefings: Attend, learn, improve.

• Request Discretionary Evaluations:

• Monitor Your PPI!

Accessing PPI via PPIRS

• PPIRS Government Access: Restricted to persons working on source selections and contractor responsibility determinations

• PPIRS Contractor Access: Restricted to viewing only your own data – Central Contractor Registration (CCR) – Marketing Partner Identification Number (MPIN)

Challenging Evaluations

FAR § 42.1503

•Initial Review: Immediately upon signature of a performance assessment, the CO will provide the contractor with a copy of the report. The contractor has fourteen days in which to submit comments, rebutting statements, or additional information

•One Level of Review: to be provided by the Agency

•Final Determination: Agency has the final say on the performance assessment

CPARS


Initiation





FAPIIS Remarks

FAR § 52.209-9(c)(2) •Rebuttal of Negative Info: Contractors are allowed to submit responses – rebuttals or explanations – for negative information. (No time limit.)

•Preservation: Contractor submissions are retained in FAPIIS for six years

•FOIA: Contractor can assert, within 7 days after information posted, that it’s protected from disclosure under FOIA. Info then will be removed within 7 days.

Caselaw and Recent Developments

Judicial Review

Court of Federal Claims (COFC) and Boards of Contract Appeals (ASBCA and CBCA)

• Jurisdiction: The COFC has jurisdiction to hear a challenge to an “unsatisfactory” performance evaluation

• Contracts Dispute Act: Challenge to performance evaluation qualifies as a “claim” under the Contracts Disputes Act

Todd Construction v. United States, 2008 WL 5248570 (Fed. Cl. Dec. 9, 2008)

• BUT: Courts remain unclear about what relief is available.

GAO Bid Protest Annual Report to Congress for FY 2015

“Our review shows that the most prevalent reasons for sustaining protests during the 2015 fiscal year were: (1) unreasonable cost or price evaluation; (2) unreasonable past performance evaluation; (3) failure to follow evaluation criteria; (4) inadequate documentation of the record; and (5) unreasonable technical evaluation.”

December 10, 2015

Challenge to Proposal Evaluation

“The critical question in our review of an agency’s past performance evaluation ‘is whether the evaluation was

conducted fairly, reasonably, and in accordance with the solicitation’s evaluation scheme, and whether it was based on relevant information sufficient to make a reasonable determination of the offeror’s

past performance.’”

The Emergence Group, GAO B-404844.7, February 29, 2012.

Fair and Impartial Treatment

In a case where: 1. Contractor was held to a higher standard than other bidders; 2. It was only ambiguously explained in the solicitation documents

as to how PPI would be used; and 3. Evaluations were performed “arbitrarily and capriciously”:

The Court granted plaintiff’s motion for declaratory relief and permanent injunction enjoining contract performance BayFirst Solutions, LLC v. United States, 102 Fed. Cl. 677 (2012)

Braseth Trucking, LLC v. United States 124 Fed.Cl. 498 (Dec. 4, 2015)

- Cannot penalize the offeror without any PPI - Agency “should have assessed whether the risks

associated with dealing with an entity with no performance record at all outweighed the benefits of choosing one that could be rated “satisfactory” but still had known weaknesses. “Once all the bidders have the same adjectival rating, in order to reasonably and rationally rank them, the [CO] must go beneath those ratings to show specifically where it finds advantage in one … offer over another … offer, notwithstanding the sameness of the ratings.”

Facts: Protestor had no PPI; awardee did have PPI but the PPI was not all favorable.

FFL Pro LLC v. United States 124 Fed.Cl. 526 (Dec. 16, 2015)

- Facts: Post award bid protest alleging that the evaluation of past performance information did not include an evaluation of applicable criteria. Narrative summary provided by the Technical Evaluation Team in support of its exceptional rating was “little more than a copy-and-paste of the solicitation’s definition of ‘exceptional.’”

- Held: The evaluation and rating of proposals, when challenged, must be supported by a coherent and reasonable explanation of the agency’s exercise of discretion. The agency’s action must “evince rational reasoning and consideration of relevant factors.”

Claims History

• Right to Challenge: A bidder cannot be downgraded by an agency for having a history of filing claims1

• Exception: If the agency shows that the claims process has been abused.

• No Incentivizing: A bidder cannot be upgraded by an agency for having a history of not filing claims. 2

1. Nova Group, Inc., B-2822947, 99-2 CPD 2. Id.; OFPP Memorandum April 1, 2002

Questions?

Mark J. Blando Eckland & Blando LLP

800 Lumber Exchange Building 10 South Fifth Street

Minneapolis, Minnesota 55402

Documents

Attention Contractors - ncmahq.org · Attention Contractors: You Will Be Graded! Past Performance in Government Contracting . ... CPAR. ABC Bids on a New RFP ABC Bids is Evaluated